B. Subba Reddy vs Ch. Sudhakar Raju And Another
2023 Latest Caselaw 357 Tel

              HON'BLE SRI JUSTICE K.SURENDER

             CRIMINAL PETITION No.2705 OF 2021
ORDER:

1. This Criminal Petition is filed to quash the proceedings

against petitioners/A1 and A2 in C.C.No.684 of 2017 on the

file of XVII Additional Chief Metropolitan Magistrate,

Hyderabad.

2. The petitioners were charge sheeted by the Jubilee Hills

Police for the offence under Sections 406, 420, 324, 506 r/w

34 of IPC.

3. Briefly, the case of the 1st respondent/complainant is

that he entered into sale agreement with M/s.Vamsiram

Builders, of which the 1st petitioner is the Managing Director

and the 2nd petitioner is the Marketing Executive. The said

agreement was entered into for the purpose of purchase of a

property, which is a flat in the construction of residential

complex undertaken by M/s.Vamsiram Builders. According to

the 1st respondent, sale consideration of flat was Rs.2.75

Crores and another Rs.1.25 Crores were taken for interiors.

However, without undertaking the interior construction, the

property was handed over. The 1st respondent thereafter came

to know that notice was issued by the HMDA to the firm

M/s.Vamsiram Builders to pay an outstanding of Rs.5.29

Crores and suppressing the same, flat was sold. To safeguard

his property, the 1st respondent filed civil suit in OS No.596 of

2016 on the file of XXI Additional Chief Judge, City Civil

Court, Hyderabad and obtained status quo order.

4. On 30.09.2016, a complaint was filed by the 1st

respondent alleging that the said agreement of sale was

entered into on 03.01.2013 for the purchase of flat No.201 in

2nd floor. However, there was a notice issued by the HMDA

dated 20.09.2012 for paying an amount of Rs.5,28,69,993/-.

Suppressing the said fact, agreement of sale was entered into,

for which reason of misrepresentation, the 1st respondent was

cheated and his acts amount to criminal misappropriation.

5. It is further alleged in the complaint that though the

accused did not complete the interiors as promised, having

taken Rs.1.25 Crores, the 1st respondent completed interiors

by incurring expenditure separately. In the month of August,

2016, Gruhapravesham (housewarming ceremony) was

performed. The petitioners allegedly sent some third parties to

his house who informed that they wanted to buy the flat from

the builder. Apprehending that the builder may sell the said

flat to someone else, civil suit was filed. On 28.09.2016, while

he was with some known persons, A1 came with a mob and

questioned the 1st respondent as to how he obtained

injunction, threatened that he would forcibly evict him from

the flat and tried to hit with rod on his head. However, the

persons present there prevented A1. The 1st respondent

received injuries on his shoulder and leg. He was joined in

Gandhi Hospital and the duty Doctor issued discharge letter

dated 29.09.2016.

6. The police, having received complaint registered the same

and concluded investigation finding that these petitioners are

liable for the offences of criminal misappropriation, cheating,

causing hurt and criminal intimidation.

7. Sri T. Pradyumnakumar Reddy, learned Senior Counsel

appearing for Sri T.Anirudh Reddy, learned counsel for the

petitioners would submit that the case is purely civil in nature

and the amounts that were paid by way of cheque was prior to

the HMDA notice dated 15.06.2013. The amount of

Rs.2,97,75,756/- was paid by the 1st respondent on

12.11.2012, 16.02.2013 and 14.03.2013, in three

installments. The question of either cheating or criminal

misappropriation does not arise since it may be breach of

contract since there was no notice of the HMDA when amount

was paid by 1st respondent. He relied on the judgment of

Hon'ble Supreme Court in the case of Uma Shankar Gopalika

v. State of Bihar and another1 and argued that breach of

contract would give rise to criminal offence of cheating unless,

it is shown that there was deception played at the very

inception. He also relied on the judgment of Hon'ble Supreme

Court in the case of G.Sagar Suri v. State of Uttar Pradesh2

in which it is observed that it is the duty and obligation of the

criminal courts to assess and conclude whether prima facie

(2005) 10 SCC 336

(2000) 2 SCC 636

criminal case is made out and issue process. The court should

be careful in issuing process when the transactions alleged are

predominantly civil in nature. In the judgment of Binod

Kumar v. State of Bihar3, the Hon'ble Supreme Court held

that unless there is a criminal misappropriation of the

property entrusted, it cannot be held that an offence under

Section 406 of IPC is made out. Finally, learned Senior

Counsel submits that a false case has been made up by the 1st

respondent to intimidate the petitioners and no such incident

happened.

8. On the other hand, it was argued on behalf of the

respondents that the petitioners having knowledge about the

issuance of notice of outstanding to HMDA, the property was

sold to the 1st respondent and for the said reason, the

petitioners have to be tried by the trial Court. The case cannot

be quashed since the allegations make out prima facie case of

criminal misappropriation, criminal intimidation and cheating.

(2014) 10 SCC 663

9. Having perused the record, there is a transaction of sale

between M/s.Vamsiram Builders, of which the 1st petitioner is

the Managing Director. It is not in dispute that the amounts

were paid and it is also not in dispute that a flat was allotted

to the 1st respondent after amount was paid and an agreement

of sale was also entered into.

10. The basis for 1st respondent to lodge complaint for the

offences of cheating, criminal misappropriation, is alleged

notice of HMDA wherein the land owner and M/s.Vamsiram

Builders were liable to pay dues around Rs.5.29 Crores. It is

not the case of the 1st respondent that such notices which are

served on the petitioners' firm or the land owner had in any

way impacted the sale transaction of the 1st respondent. It is

not the case that the 1st respondent was issued notice to pay

any amount on failure of the outstanding amount being paid

by the land owner or M/s.Vamsiram Builders. No liability is

passed on to the 1st respondent in view of there being a

demand of Rs.5.29 Crores by HMDA to the land owner. In the

said circumstances, when there was no impact in any manner

or affecting the rights of the 1st respondent as a purchaser, it

cannot be said that there is any criminal intent on the part of

the petitioners to cheat the 1st respondent. There is neither

fraudulent inducement nor any wrongful loss that has

resulted due to the notice of the HMDA.

11. For the aforesaid reasons, no offence under Section 420

of IPC is made out. Further, the amounts that were paid to

M/s.Vamsiram Builders were not disputed and the flat was

also not sold to any third parties, as such, the question of

criminal misappropriation does not arise. However, the

incident happened on 28.09.2016, when allegedly the

1st petitioner went to the premises of the 1st respondent along

with some other persons and assaulted him. The same cannot

be determined to be a false statement made by the

1st respondent in view of the medial certificate available.

Whether there was an assault or criminal intimidation are

subject matters of trial to be decided after examination of the

witnesses.

12. As far as the 2nd petitioner is concerned, there are no

allegations against 2nd petitioner, who is Marketing Executive..

He was not named as the person who had assaulted the 1st

respondent on the said date. For the said reason, the

proceedings against 2nd petitioner are quashed. The

proceedings under Sections 420 and 406 of IPC are also

quashed against 1st petitioner. However, the trial Court is

directed to proceed against the 1st petitioner in respect of other

offense under Section 324 and 506 of the IPC in CC No.684 of

2017.

13. Accordingly, the Criminal Petition is allowed in part. As a

sequel thereto, miscellaneous applications, if any, shall stand

closed.

__________________ K.SURENDER, J Date: 27.01.2023 kvs

HON'BLE SRI JUSTICE K.SURENDER

CRIMINAL PETITOIN No.2705 OF 2021

Date: 27.01.2023

kvs